The Latest in Global Money Printing

Greetings! Welcome to the When Money Destroys Nations newsletter covering money printing trends, hyperinflation storm warnings, monetary system transition, the decline of dollar supremacy, cryptocurrency, and precious metal trends. We are coming off a great first two months of the launch of our book, When Money Destroys Nations. Globally, money printing is becoming a serious consideration for most countries that are indebted and Zimbabwe’s lesson has never been more applicable. You’re part of a growing group of people steadily educating themselves about the real consequences of money printing and how the global monetary system is evolving with each passing day. We won’t spam you. If something big is happening that we think you should know about, we’ll let you know, but normally we’ll only send around one or two emails per month. We welcome your feedback and questions – tell us what you want to know about in the fascinating world of money printing and monetary systems. And remember, if you find it’s not for you, you can unsubscribe from the mailing list quickly and easily at the bottom of this email. Japan goes over the money printing hill In the last month, Japan announced an increase to its money program – printing money at a rate of ¥80 trillion per year. To put this into context, that is over ¥620 000 ($5 300) printed per person in Japan every year!  If only life were as simple as printing money whenever we needed it. The ridiculous aspect of these statistics are that the newly created money doesn’t go to the population. This money goes to special interest groups in...

Why Zero Interest Rates Can Never Work

When the central bank meets to decide on the level of interest rates, most people care about only one thing: are my home loan, car and credit card repayments going up, down or staying the same? Although this is no trivial concern given the importance of managing a household budget, such a limited view does scant justice to the broad, critical and complex role interest rates play in an economy. The usual narrative is that low rates are good and high rates are bad. But the real problem is not “high” interest rates, but wrong interest rates. You see, interest rates are prices. Like the price of a soda drink is agreed between seller and buyer, so interest rates are the price of loans agreed between lender and borrower. Suppose the government forced the price of sodas to half their market level, jailing anyone caught selling them at any price above this new level. What happens? Soda lovers flock to the stores to buy soda. Soda makers, by contrast, make heavy losses and either close down or find some way to make cheap and nasty soda for half the original cost. The supply of soda plummets, while the quality of soda freefalls. Paradoxically, setting a price artificially low makes a product easy to buy for a while, but eventually impossible to buy at all. Interest rates in most modern economies work the same way. The central bank forces this price to a desired level through extensive regulatory control over the banking system, relying on the fact that the money it creates is the only legally permissible money used in trade. When the central bank forces interest rates too low, borrowers think life is great. Houses, cars, and furniture seem cheap and starting a business with a loan is easy. Except that discerning...